Santa Fe ALI Conference: Seymour 2015 Paper on Arbitration

I wrote the attached paper for the American Law Institute’s July 2015 Employment law program in Santa Fe, New Mexico.

ALI 2015 Santa Fe Seymour Paper on Arbitration

It touches on the following issues:

Table of Contents
I. Who Decides What Issue? …………………………………………………………………………………….. 1
A. Validity of the Contract Containing the Arbitration Clause, as Opposed to Validity of
the Arbitration Clause Itself ………………………………………………………………………………………. 1
B. Side Note: High Standard for Determination of Unconscionability …………………………. 2
C. Whether the Agreement Permits Class or Collective-Action Arbitration …………………. 3
1. Where the Agreement Specifies ………………………………………………………………………. 3
2. Where the Agreement is Silent ……………………………………………………………………….. 4
3. What Happens Next? …………………………………………………………………………………….. 4
II. Special Problems with Post-Dispute Imposition of Arbitration Agreements ………………… 7
III. Waiver of Arbitration Agreement ……………………………………………………………………….. 7
IV. What is Being Arbitrated? …………………………………………………………………………………. 8
A. The “Terra Incognita” of the Issues, Compared to Litigation …………………………………. 8
B. Scope of the Arbitration …………………………………………………………………………………….. 9
1. Where the Plaintiff is Not a Signatory ……………………………………………………………… 9
a. Suits by the Government Seeking Relief for the Employee …………………………….. 9
b. Suits by the Employee’s Survivors ………………………………………………………………. 9
c. Equitable Estoppel …………………………………………………………………………………… 10
(1) Claim Not Based on Contract with Arbitration Clause ………………………….. 10
(2) Intertwined Claims ……………………………………………………………………………. 11
(3) Claim Based on Contract with Arbitration Clause ………………………………… 12
d. Agreement Explicitly Applies to Nonsignatories …………………………………………. 13
2. Where a Complained-Against Entity is Not a Signatory …………………………………… 13
a. Parent/Subsidiary and Agency Relationships ………………………………………………. 13
b. Claims Against Nonsignatories ………………………………………………………………….. 14
3. Where Not All Claims Are Covered by the Agreement ……………………………………. 16
a. Effect of Dodd-Frank Arbitration Bar in a Multi-Claim Case ………………………… 16
b. CBA Requiring Arbitration of Some, But Not All, Claims? ………………………….. 17
c. Agreement Covers Some But Not All Claims ……………………………………………… 17
d. The “Necessary to a Resolution” Standard ………………………………………………….. 18
e. The “Touches Upon” Standard ………………………………………………………………….. 18
4. “Arising in Connection With” Language ………………………………………………………… 19
5. Different Contracts, Some with Arbitration Clauses and Some Without …………….. 20
6. Where the Obligations, By Contract, Go Beyond Contract ……………………………….. 23
a. Tort Claims …………………………………………………………………………………………….. 23
b. “Honorable Engagement” Provisions …………………………………………………………. 23
V. The Role of State Arbitration Codes ……………………………………………………………………… 25
A. General ………………………………………………………………………………………………………….. 25
B. Provisions Barring Certain Relief, Like Punitive Damages ………………………………….. 26
VI. Conduct of the Arbitration ……………………………………………………………………………….. 26
A. Scheduling of Hearings ……………………………………………………………………………………. 26
1. Discovery Hearings ……………………………………………………………………………………… 26
2. Merits Hearings …………………………………………………………………………………………… 27
3. Refusal to Postpone the Hearing on Sufficient Cause ………………………………………. 27

B. Role of Rules of Evidence and Objections …………………………………………………………. 28
C. Differences in Presentation of Evidence, Between Litigation and Arbitration ………… 29
VII. Obstacles to Arbitration …………………………………………………………………………………… 30
A. Attempted Frustration of Arbitration by Failure to Pay Fees ………………………………… 30
B. A Party’s Refusal to Cooperate …………………………………………………………………………. 31
VIII. Arbitrator’s Authority to Award Sanctions …………………………………………………………. 31
A. Explicit Sources of Authority …………………………………………………………………………… 31
B. Incorporated Sources of Authority…………………………………………………………………….. 32
C. Inherent Sources of Authority …………………………………………………………………………… 33
D. Just How Big Can the Sanctions Be? …………………………………………………………………. 34
IX. After the Arbitration ……………………………………………………………………………………….. 35
A. Motions to Confirm or Vacate ………………………………………………………………………….. 35
1. Reversing Vacatur ……………………………………………………………………………………….. 35
B. Attorneys’ Fees on Motions to Confirm or Vacate? …………………………………………….. 36
C. Effect of Arbitral Findings in Collateral Litigation or Arbitration …………………………. 37